19 Mar EU releases new Action Plan on Sustainable Finance
The European Commission has released its new Action Plan on Sustainable Finance, following the publication of its High-Level Expert Group’s recommendations for supporting the sector. The Action Plan has three main aims:
- reorient capital flows towards sustainable investment
- manage financial risks stemming from climate change, environmental degradation and social issues
- foster transparency and long-termism in financial and economic activity.
The proposals include creating a new EU-wide taxonomy for ‘sustainable’ or ‘green’ financial products and formally requiring asset managers to consider sustainability in their decisions. Financial advisors will also be required to ask their clients about their clients sustainability preferences – something long called for by the UK’s sustainable and social investment industry.